Frutta Bowls
Fruitta Bowls offers health-centric bowls and smoothies in multiple locations, known for acai and pitaya bowls. Part of the quick-serve restaurant industry, it requires significant investment for franchisees.
Frutta Bowls franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to open one Frutta Bowls® restaurant ranges from $457,500 to $702,500. This includes a $105,000 development fee paid upon execution of your development agreement and the initial investment needed to open and commence operations of the first restaurant you are granted the right to develop within your designated area. [p.1]
What is the initial franchise fee?
The initial franchise fee is $35,000 [p.60]. This fee is non-refundable upon payment [p.60] and is uniformly imposed for opening a Frutta Bowls restaurant [p.12].
What are the ongoing royalty and advertising fees?
The franchisee must pay ongoing royalties between 3.00% and 6.00% of net sales (or a minimum as defined) to the company [p.149, p.175]. Advertising service fees are recognized when related restaurant sales occur based on the application of the sales-based royalty exception within ASC 606 [p.175]. These fees are typically billed and paid weekly [p.175].
How long is the initial franchise agreement, and can I renew it?
The term length of the initial franchise agreement isn't specified in these excerpts. Additionally, whether you can renew the agreement isn't detailed here either; however, the FDD does mention that a franchisor may change its manuals and business model without your consent, which could potentially impact renewal terms [p.3].
Can I sell or transfer my franchise, and what does that require?
You can sell or transfer your franchise, but it requires payment of a transfer fee unless certain conditions are met [p.16]. The franchisor can refuse to permit the transfer for good cause, which includes but is not limited to specific reasons [p.5].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on various grounds, including if the franchisee fails to comply with lawful provisions of the franchise agreement and does not cure such failure within a reasonable time [p.5], if the franchise does not open within twelve months from signing the agreement [p.218], or if the franchisee voluntarily or involuntarily files for bankruptcy [p.225]. Additionally, the franchisor may terminate the agreement on any grounds available by law [p.232], but termination without reasonable cause is restricted under Virginia Retail Franchising Act [p.239].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts focus more on working capital needs during operations and the maintenance of adequate funds but do not detail specific net worth or liquid capital requirements for qualifying as a franchisee.
Do I get an exclusive or protected territory?
You do not receive an exclusive territory; instead, you are provided with a protected territory ("Territory") for your Approved Location. However, the franchisor may operate and license others in captive locations within your Territory, which could result in competition from other franchisees or outlets owned by the franchisor [p.36].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program lasting about 10 days, which includes classroom and practical experience on various aspects such as financial controls, food preparation, operational techniques, marketing, sanitation, and quality maintenance. This training is mandatory for at least two of the franchisee's management personnel, with one required to complete a sanitation certification course. All related expenses are the franchisee’s responsibility. Ongoing support includes ensuring that each restaurant is staffed with a manager who has successfully completed this initial training program. [p.75, p.28, p.123]
How many franchised outlets are there, and how many have closed or been terminated?
As of September 29, 2024, there were 25 franchised outlets in the system, with 21 operating for the entire fiscal year [p.49]. The FDD does not specify the number of franchised outlets that have closed or been terminated; however, it mentions that the Company closed two traditional locations and seven non-traditional locations over the specified periods [p.179].
Does the franchisor share any financial performance or earnings information?
The franchisor may share actual records of an existing outlet if a franchisee is considering purchasing one. Additionally, they can supplement the information provided in Item 19 with possible performance at a particular location or under specific circumstances [p.49]. However, the franchisor does not make any financial performance representations beyond this and does not authorize its employees or representatives to provide such information either orally or in writing [p.49].
What am I restricted to selling, and where must I buy supplies?
You are generally required to sell items consistent with the Frutta Bowls system, though specific product restrictions are not detailed in these excerpts. You may have to purchase or lease certain items from the franchisor or a limited group of suppliers they designate, as mentioned on page [p.3]. This could potentially lead to higher costs compared to sourcing independently.